Wellness programs now a business imperative

Defining the return on investments in workplace wellness is one of the biggest challenges for employers with "the best intentions", but data is critical to continuing support for programs, says Aon Hewitt principal Danni Hocking.

"Gone are the days when workplace wellness programs were a nice thing to have," she has told a webcast for HRD Plus subscribers.

"It's now a business imperative. We have to be seen to invest in the health of our workforce."

One of the problems associated with garnering support for workplace wellness is the "siloed" approach most organisations take to people-risk management, and confusion over "who is responsible" for wellness, says Hocking, who leads Aon Hewitt's people risk solutions practice.

But the critical reasons for investing in health cross departmental boundaries:

• Compliance - the WHS Act, which applies in all jurisdictions except for WA and Victoria, "clearly defines that psychological risk must be mitigated, and a workplace should be providing a work environment free from risk", Hocking points out;

• Human resources - Research demonstrates that "fit and healthy workers are far more profitable than unhealthy ones. So for an HR director, having fit and healthy workers is paramount";

• Profit - "The CFO is driven by profit. He or she is certainly concerned with the impact that people risk is having on the business";

• Remuneration and benefits - Investing in wellness assists with attraction and an employer's value proposition, for example.
  

Know your risk profile

Employers can use any of the tools available in the marketplace to measure the health of their workforce and understand where their risks lie, Hocking says.

This includes both physical and mental health risks - such as obesity risks for sedentary workers, and mental health risks for workers whose deadlines become more pressing at certain times of year.

"Once you analyse risk factors, you can provide programs that are targeted and relevant, which will drive participation and engagement. Through engagement you will foster a positive culture, and [become a] preferred place to work. All of this is designed to enhance your bottom line."

But first, baseline data is critical for the future sustainability of any health and wellbeing program, Hocking says.

"Defining your return on investment has, in my experience, been the biggest challenge facing organisations that have the best intentions of creating and maintaining quality health and wellbeing programs. They do not know how to articulate their spend or the benefit they're obtaining from the program.

"Baseline data measurements are critical to establish the business case, help you design the program, and establish performance indicators. If you can't monitor the performance, then the funding for the program is likely to dry up in times of trouble.

"If you can't articulate your ROI, and savings, then the program won't be sustainable or valued as part of your business strategy."

She concedes that measuring ROI on wellness is "not easy to do", and requires detailed consideration of areas of risk.

"This type of analysis is essential, and it needs to be understood by the CFO... They need to be involved in the journey, to understand the impact the costs of that program is having to the business.

"Once that has been articulated, the CFO is often the one that will be handing out the allocation of funding required to mitigate the risk and implement your other solutions, so the importance of return on investment, I cannot stress enough."

Avoid silos

Any wellness program needs to be tailored to the business, but importantly, it should not operate in isolation of other initiatives - "it should be integrated and aligned to your overall business goals", Hocking says.

"The most common mistake we see in client businesses is the fact that risks are managed in isolation by business units. For example, finance would understand the organisation's financial risk, but would probably have a limited understanding of the OHS risks, or HR risks, involved with employees who work in foreign countries.

"So it's important to bring that risk profiling together in a cohesive strategy, in which a holistic view of the risks can be identified, and can be addressed as part of the wellness program."

Hocking says any effective wellness program will address the six drivers of employee wellness, which ensure workers are "healthy" in their career, social connectedness, finances, physicality, emotions and community connectedness.

To learn more about what a wellness program should address, watch the webcast.

Reference: HR Daily 04July 2013.